The UK’s Brexit vote may have been unsettling Britain’s economy lately but Aberdeen Asset Management (AAM) investors have benefited through the uncertainty.
A trading update from the Granite City-based financial services giant yesterday showed the value of assets under management (AuM) rose by £8.6billion during the three months to June 30.
AAM chief executive Martin Gilbert said the company was well-placed to prosper after market weakness in the immediate aftermath of the EU referendum gave way to a strong recovery, while a plunge in the value of the pound had also helped the business.
He added: “The performance of our funds has been spectacular for the last six months.
“Hopefully, next year will see a recovery of inflows.”
AAM recorded total net outflows of £8.9billion during the quarter to June 30.
The firm said there was a “small improvement” in equity outflows, partly reflecting investors’ comfort with their current exposure to emerging markets.
It added: “Equity investment performance has continued to recover strongly as markets have again begun to favour the high quality stocks that populate our portfolios.”
AuM grew to £301.4billion, from £292.8billion at March 31, as heavily overseas-leaning AAM cashed in from a weakening in the value of sterling against most other major currencies, as well as “resilient markets and good investment performance”.
The company is also seeing cash coming into its UK Property Fund again after taking action, including a week-long suspension of trade, to stem outflows in the wake of the surprise Brexit vote.
AAM may make a further property fund “dilution adjustment” – effectively a markdown on withdrawals – in light of the recovery, Mr Gilbert said, adding the wider market’s sudden move to stop clients “rushing for the exit” was now looking like an over-reaction.
And he said the UK’s planned exit from the European Union was unlikely to have much of an impact on AAM operationally as its mainland European interests were run out of Luxembourg.
Summing up the first nine months of AAM’s current trading year, he said: “We continue to benefit from the diversified asset and client base of the business.
“Currency, exposure to a broad mix of assets and good investment performance outweighed the net outflows the business experienced this quarter.
“There are many uncertainties out there, including the shape of the UK’s future relationship with the EU, which might undermine market confidence.
“We remain well-placed to take advantage, on behalf of our clients, of any weakness and will continue to focus on fundamentals rather than be distracted by market noise.”
